2026-06-30 · 8 min read
Amazon PPC Basics for Sellers 2026: How Sponsored Products Actually Work
A practical introduction to Amazon PPC advertising in 2026: how Sponsored Products work, keyword match types, bidding basics, and how to structure your first campaign.
What Amazon PPC Is
Amazon PPC (Pay-Per-Click) advertising lets sellers pay to appear in search results and product pages. You only pay when someone clicks your ad. The most common format is Sponsored Products -- ads that look identical to organic search results but appear at the top, bottom, or within the results page. Unlike Google Ads where you pay for visibility, Amazon PPC is strongly purchase-intent driven: users searching 'stainless steel water bottle 32oz' are usually ready to buy, not just researching.
How the Auction Works
Amazon PPC is a second-price auction. When a shopper searches, Amazon runs a real-time auction among all sellers bidding on that keyword. The highest bidder wins the ad placement but pays the second-highest bid plus $0.01. This means your actual CPC (cost per click) is usually lower than your maximum bid. Placement also depends on relevance score -- a highly relevant listing with a moderate bid can beat an irrelevant listing with a high bid. Amazon wants clicks that convert, not clicks that bounce.
Keyword Match Types
Broad match: your ad shows for the keyword and related searches (including misspellings, synonyms, and variations). Widest reach, least control. Phrase match: your ad shows when the exact phrase appears in the search query, in order, with additional words allowed before or after. Exact match: your ad shows only for the exact keyword (and very close variants). Most control, lowest reach, usually highest conversion rate. Negative keywords: explicitly exclude searches you do not want. Essential for preventing broad-match campaigns from wasting budget on irrelevant queries.
Auto vs Manual Campaigns
Automatic campaigns: Amazon decides which keywords to target based on your listing. Good for discovering new keywords. Run these first on a new product with a moderate budget ($10-20/day) and mine the search term report after 2-4 weeks to find which terms are converting. Manual campaigns: you specify exact keywords and bids. More control, more work. Once you have data from auto campaigns, transfer your best-performing keywords to manual campaigns where you can optimize bids more precisely.
Basic Campaign Structure for New Sellers
Start with one auto campaign per product at $10-15/day. Run for 3-4 weeks. Download the search term report and identify: terms with purchases (add to manual exact-match campaigns), terms with many clicks but no purchases (add as negatives to stop wasting spend). Create a manual campaign with your best exact-match keywords, starting bids at 50-75% of the suggested bid. Optimize bids weekly: raise bids on converting keywords, lower or pause non-converters. ACoS (Advertising Cost of Sale) = ad spend divided by ad revenue. Target ACoS depends on your margins -- for most physical products, 20-35% ACoS is sustainable.